Russia
New England editors find Russian journalists
struggling for a voice -- and a business model
(Written in January, 1993)
By Bill Densmore
ST. PETERSBURG, Russia -- Weekly newspaper owner Natasha Chaplina has trouble finding English words to describe the economic dilemma facing Russia's fledgling free-market democracy. She turns to an interpreter for help.
"Last week," she says, "a retired journalist from the World War II-era came into our office. He described the situation this way: He said it is like a casualty entering a military field hospital. The patient is told he must have a major operation or else die. The good news is that there is a surgeon and he has the proper instruments. The bad news is that there is no anasthesia available."
The patient's choice: Endure excrutiating pain under the surgeon's scalpel or die. And how long will the operation take?
When Boris N. Yeltsin goes before the Russian Congress on on Tuesday, he might do well to pose the same dilemma to the 1,046 members, many of whom are squirming under the pain of his economic scalpel. Elected for five years in 1990, most of the congress is composed of former communists who are openly skeptical of Yeltsin.
They hope that slowing down the operation will ease the pain. Yeltsin and his pro-Western acting prime minister, Yegor Gaidar, believe that will only hasten the patient's death, leading to further dismemberment of the former USSR.
After an August, 1991 attempted coup, Russia's 148 million citizens pulled the plug on communism, and with it a network of state-controlled industry. But they have yet to firmly link their nation's workplaces together with a functioning free market.
To an even greater degree than the United States, Russia's economy has been driven by the military-industrial complex. With the Cold War declared over, the large-scale sector is being slowly starved by Yeltsin and told to privatize and convert to consumer products.
Lacking basic knowledge of where to find markets for its goods, it is balking.
On a smaller scale, about 11 percent of the nation's 122,549 small-scale enterprises -- stores, restaurants and other retail businesses with 200 or less employees -- have been privatized, officials of the International Finance Corp., a united of the World Bank, said Nov. 19.
"The state factories make 100 bottles of beer and send them to the state-owned shops," says Yagya Vatayai, a former Third World economist who is now the appointed deputy mayor of St. Petersburg. "And the entrepreneurs buy these 100 bottles in the state store and around the corner sells them for twice or three times the price. This is not a free market. This is the general situation all over."
How long will average Russians tolerate an economy stuck in neutral, as political leaders and nouveau capitalists debate how to get commerce flowing smoothly again? "Six months," deputy prime minister Mikhail Poltoranin replied two weeks ago in an interview with New England newspaper editors. "They must work. If they don't work at all, Russia would be on the brink of civil war."
Yeltsin wants the controlling Civic Union coalition of capitalists, former Communists and state industry managers in congress to extend his broad presidential decree-making powers so he can press ahead with tight money policies and uncontrolled wages and prices.
Last week, he cast off at least three of his close advisers -- including Poltoranin -- in sacrificial acts intended to convince the Civic Union that he will bend toward its requests for renewed state control without bowing on fundamental free-market reforms.
Civic Union's key demand is that the government continue to extend credit to the nation's heavy industries in order to avoid factory closings and massive unemployment this winter. Yeltsin is offering to prop up chiefly military factories that show promise of being able to convert to consumer products.
To readers of U.S. newspapers, the debate over prices, wages and monetary policy may appear theoretical. In the United States, however, there is already a functioning economic system, however flawed. In Russia, no system has yet to really shift into gear.
The anxiety -- and hope -- which Russians feel toward the future was expressed everywhere that a group of eight New England editors traveled during a 10-day visit to Russia earlier this month.
"There is no country in the world where such processes would be without blood, without suffering," says Yuri Syakov, an editor of the daily newspaper in Volkhov. "People think they should wait a necessary period. We have no civil war in Russia, although the standard of living is going down. It is our national character to be patient."
The New England Society of Newspaper Editors delegation traveled to St. Petersburg, Moscow, and Volkhov, a city of 50,000 residents about 80 miles northeast of St. Petersburg. They met with fellow Russian editors, businessmen, public officials, and with some factory and textile workers, conducting more than two dozen interviews.
They found most Russians remarkably patient about the wrenching changes taking place. While they criticize Yeltsin, they seem willing to continue backing him, seeing no viable political alternative. And they seem passionately committed to maintaining the individual freedoms they have won.
But in the meantime, they are enduring a second winter of wildly escalating prices. Food is expensive, but available. Russians interviewed all said they expect no one will starve this winter. This year's grain harvest was 15 percent above a year ago.
"We lived lived easily, more better, during socialism period than now," factory worker Vanya Mironava, 41, told editors who toured an electrical capacitor plant north of Volkhov. "That life was better, and easier. In this time I see nothing good. Nothing. And I haven't plans for the future because I'm not sure of the next day."
One of Yeltsin's reforms will give all Russians vouchers for shares in industrial and service firms, with the first auctions of the vouchers to be held Dec. 15 in four cities. The Volkhov factory where Mironava works has just received permission to privatize. In that and another factory visited, workers will become majority owners with their bosses.
Oil, gas, power and communications companies will continue to be controlled by the government for at least three years.
But there is still a debate about how to return land ownership to private individuals. Yeltsin wants to do so quickly; some long for the old days of collective farming. On Nov. 18, a citizens group said it had gathered 1.8 million signatures to force a referendum on land privatization.
On Nov. 20, ITAR-Tass reported that 70 percent of the respondents to a public opinion poll of Moscow residents believe private land ownership should be guaranteed by the Russian constitution and 47 percent would like to be able to use their privatization vouchers to buy land instead of stock.
A first-time traveler to Russia is struck by many things. There are few bright lights or billboards, although the onset of capitalism is changing that quickly.
Gasoline is scarce and expensive so few people drive automobiles regularly. But the extensive Moscow and St. Petersburg subways runs every few minutes late into the evening.
The overnight train between the nation's two largest cities runs exactly on time and every half hour or so. But there are no individual heating or cooling controls in a two-berth cabin.
Roads are wide, parks spacious and important public buildings statuesque. Yet millions of Russians live in communal apartments, sharing bathrooms, kitchens and entries with one or more other families. Moscow and St. Petersburg are ringed by mile-upon-mile of featureless high-rise apartments which appear similar to the public housing of urban America.
Everywhere there is evidence of the state's commitment to the public, but not to the individual. Under capitalism, that is beginning to change. The free market is bring expensive cars, restaurants, suburban homes, organized business -- and organized crime. The government debates how it will maintain the social "safety net" for its pensioners and unemployed.
While pensioners suffer and industrial workers worry whether their jobs will survive the drift away from miltary production, the emerging class of capitalists gets rich buying and selling food and consumer goods to which Russians have only recently gained broad access. And that accumulation of wealth is fostering ill-will.
"Your meaning of businessman and ours are different," Volkhov English teacher Olga Burdakova, 32 told one editor. "Most of our businessmen buy and sell -- they do not make anything."
The practice of paying petty bribes to government officials so common under communism has survived unabated in Russia and has migrated into the private sector as well, editors were told. In a speech earlier this month, former U.S. Secretary of State Henry A. Kissinger called the Russian economy a collection of mafia fiefdoms rather than an orderly free market. Businessmen illegally carry guns to protect themselves from attack.
The Associated Press, quoting police officials, reported that Russia's crime rate rose 33 percent in the first half of this year, from 1 million total crimes to 1.3 million. Murders and other violent crimes were up by one-fourth, with 185,000 reported. In the first six months of 1992, there were 3,700 crimes involving weapons -- including 712 deaths -- compared with 4,900 crimes with weapons in all of 1991.
It remains illegal for an average Russian to own a revolver. On Nov. 11, Yeltsin decreed that farmers may own hunting rifles and ordinary Russians may own tear-gas guns for self defense.
In Volkhov, Burdakova's mother, who is 84, cannot live normally or her typical pension. Recently, she had only 10 roubles for food. She bought a single egg. Like many Russians her age, Burdakova supplements her mother's pension with her own income and she shops at privately owned shops, instead of state-owned ones, because "the clerks are nice, even though the prices are higher."
Indeed, the taste of capitalism has introduced a new concept in Russian markets -- service. Like choice of products, the emerging ability to purchase land and apartments back from the government for private use and the freedom to argue about politics, service is something Russians seem determined to retain.
Russian journalists, officials and businessmen alike made pragmatic appeals to the American editors for foreign investment, not as an act of charity, but as a way of assuring Western security by stabilizing Russia.
"If aid is limited to the present scale, we would try to overcome all these difficulties ourselves," Poltoranin told the visiting editors 10 days before he was forced to resign to appease Yeltsin's political opponents. "We would pay a greater price [and] the basis for our future relations with the United States would be different.
Like Chaplina, the St. Petersburg weekly newspaper owner, Poltoranin then resorted to allegory.
"When a person is pushed into the cold waters and he is floating along the river, watching the people standing on the bank of the river, without outstreating their hands to help, when he manages to come to shore and walks along the faces, he looks at them with a particular feeling," he said.
If the United States and other western democracies help, Russian will surely emerge from the operation with its centuries of culture intact. The Russian economy needs to develop a consumer segment and it needs technical and financial help doing so.
If the United States helps, we may have to make some material sacrifices domestically. But that may be the price of world peace.
Bill Densmore, former co-owner and editor of THE ADVOCATE newsweeklies of Berkshire County, was among New England editors who traveled to Russia. He lives in Williamstown, Mass.
